Does FinTech Substitute for Banks? Evidence from the Paycheck Protection Program
This study of loan-level Paycheck Protection Program data finds that despite a lag in approving several fintech lenders to participate in the program, such lenders provided disproportionate amounts of PPP funds in ZIP codes with fewer bank branches, lower incomes, and a larger minority share of the population, as well as in industries with little ex ante small-business lending. Fintechs’ role in PPP provision was also greater in counties where the economic effects of the COVID-19 pandemic were more severe.
Isil Erel & Jack Liebersohn, National Bureau of Economic Research Working Paper No. 27659
August 2020